I was in my 5th grade classroom. Another student came back into the classroom after running something to the main office, and shared with the teacher and the class what she just heard had happened down in the office. The teacher sent another student over to the library who wheeled a TV back to the classroom, and we all got to watch the explosion over and over. A little while later, the principal came on the PA, announced the news that all seven astronauts had perished, and called for a moment of silence.
I'll never forget. The Challenger question is the closest thing my generation has to the ?where were you when Kennedy was assassinated?? question. News of such magnitude tends to etch itself permanently into such young minds.